Venture Capital / Private Equity Sector, 2007

U.S. Market Overview

The United States maintains the oldest and most dominant position worldwide in venture capital. It is the top target worldwide for inward venture capital investment as a result of quality deal flow and access to quality entrepreneurs. The United States has the fewest impediments to investing of all regions worldwide according to the accounting firm Deloitte & Touche.

U.S. venture capitalists invested $25.5 billion in 3,416 deals in 2006, realizing a 10 percent increase in deal volume and a 12 percent increase in dollar value.

In 2005 venture capital investments worldwide reached the level of US$31.3 billion. The United States, Canada, Europe, and Israel represent 93 percent of capital invested, while China and India account for the remainder.

The National Venture Capital Association - seen as the key association for venture capital firms- has approximately 480 members.

Venture capital-funded companies were directly responsible for more than 10 million jobs and $1.8 trillion in sales in 2003. Venture capital-backed companies added some 600,000 net jobs to the U.S. economy between 2000 and 2003. During 1970-2000, American venture capitalists invested $273.3 billion in 16,278 companies in all 50 states; $192 billion of that investment took place during 1995-2000. Venture capital-backed firms employed 7.6 million people and generated $1.3 trillion in sales during 2000, representing 5.9% of the nation's jobs and 13.1% of America's GDP that year. Venture capital-financed companies had approximately twice the sales, paid almost three times the federal taxes, generated almost twice the exports, and invested almost three times as much in research and development per $1,000 in assets as did the average non-venture capital-backed companies. On average, every $36,000 in venture capital investment created one new job.